Examination of Witnesses (Questions 108
- 119)
WEDNESDAY 18 JANUARY 2006
MR KEVIN
HIGGINS, MS
CARYL WILLIAMSON,
MS SIOBHAN
HARDING AND
MS ANDREA
BEDELL
Q108 Chairman: Can I welcome you
to the Committee. Thank you very much for coming along particularly
from Northern Ireland. Could you each introduce yourselves formally
for the benefit of the shorthand writer, please?
Mr Higgins: My name is Kevin Higgins.
I am Head of Policy with Advice Northern Ireland.
Ms Williamson: My name is Caryl
Williamson, I am Regional Co-ordinator for Advice and Information
with Age Concern Northern Ireland.
Ms Harding: I am Siobhan Harding,
Information and Policy Officer with Citizens Advice Northern Ireland.
Ms Bedell: I am Andrea Bedell.
I am an advice session supervisor from Ballymena Citizens Advice
Bureau.
Q109 Chairman: Thank you very much
for coming to assist us with our inquiry. Do not all four of you
feel you have to answer every question because we have got quite
a lot to get through and there are other witnesses appearing after
you, so if you could try and take it in turns or answer the areas
you think you are best qualified to answer. If I could start with
a very general question. The Government's intention was that tax
credits would help tackle poverty, obviously. You have high levels
of poverty in Northern Ireland and to some extent higher costs
of living. Generally, how effective do you think the tax credit
system has been there?
Mr Higgins: I suppose I would
have to say there is no doubt that [it] has delivered en masse
£16 billion worth of benefits to approximately six million
households, but I have to question is it an understandable and
comprehensible system for the people that it is mostly aimed at
supporting. Certainly we would question the impact of overpayments
on vulnerable and low income households. Finally, we would have
to question the opportunity lost in government of going down the
road of this current system and what difficulties could have been
alleviated by taking some other option towards this sort of support.
Q110 Chairman: Any other general
comments?
Ms Harding: Yes. In principle
we believe that the tax credit system is a good system providing
it does not have the administration problems that have beset the
system since its introduction. The fact that there is flexibility
in awards that respond to changes in circumstances is a good thing
and can work well for people who do not have a lot of changes
in circumstances or where their circumstances remain very much
the same over a period of time. It is for those people who have
lots of changes in circumstances and varying degrees of childcare
or who are in and out of low paid work where the system does not
work as well. It is those administration problems that have taken
away from the policy objectives of the system to tackle poverty
and make work pay.
Q111 Chairman: When the Government
came to announce its first reform back in May 2005, the Paymaster
General said she wanted to work with the voluntary sector in improving
the system. Has that included Northern Ireland specifically? Has
HMRC been in touch with you about improving the system?
Ms Harding: In actual fact, what
we have seen in Northern Ireland is a reduction in the service
provided by HMRC to CAB.
Q112 Chairman: A reduction?
Ms Harding: A reduction in the
service. From April 2005 the customer services facility that used
to exist in Belfast was removed to Preston. That has removed a
lot of key local contacts that we were able to build up in Northern
Ireland to answer the complex or more involved cases. That has
been removed since April. Also, we have seen removed the facility
for us to meet with HMRC representatives in Northern Ireland to
talk about issues face-to-face. That whole area of local communication
has been removed from Northern Ireland.
Q113 Chairman: When did that happen?
Ms Bedell: It was when Revenue
merged with Customs in April and there was a complete reshuffle
of their systems.
Q114 Chairman: Are you aware of the
Tax Credits Consultation Group?
Ms Harding: Yes.
Q115 Chairman: Are any of you part
of that?
Ms Harding: No, we are not. There
used to be an Inland Revenue Regional Consultation Panel held
in Belfast but that was removed some years ago. Now our only way
of feeding into that consultation panel is by sending our social
policy evidence to the Social Policy Officers in National Citizens
Advice who then bring that with all of their own social policy
evidence to that meeting. That is not an ideal situation obviously.
Q116 Chairman: Are you aware of any
Northern Ireland representative on the consultation group or anybody
who comes from Northern Ireland on the group?
Ms Harding: I am not aware of
any.
Mr Higgins: It is my understanding
that the consultation group has issued an invitation to the Advice
Services Alliance in Northern Ireland to invite somebody to attend
those meetings but as yet, for whatever reason, that invitation
has not been taken up. Whatever the reason may be, there is no
Northern Ireland representation on that consultation forum.
Chairman: That is something we shall
probably return to.
Q117 Lorely Burt: Could I ask Mr
Higgins, you ran an e-consultation of your members about the impact
of tax credits. I just wondered what the main findings of that
consultation were.
Mr Higgins: We ran that e-consultation
more or less from the month of February last year and it ran to
March 2005. Basically we were more or less overwhelmed with the
number of messages that were posted on to the forum. When we finished
the forum at the start of March we tried to sift that and turn
it into a manageable report. What came out of that was very clearly,
first of all, the emotional impact that the overpayments issue
is having on people. To quote one thing from that: "Please,
please, please, someone help me. I cannot sleep at night worrying
about this". The emotional impacts very clearly came through.
As to definitive issues, there were communication issues between
HMRC and claimants, operational issues, the likes of technical
problems and IT problems, and the strategic issues to do with
overpayments being inherent in the system and problems with recovery
and people not feeling empowered enough to dispute the recovery
process.
Q118 Lorely Burt: I am sure there
is not a Member around this table who has not had a similar type
of situation. We have all been besieged by our own constituents
who are in this terrible situation. I do sit on the Northern Ireland
Grand Committee so I know a bit about the situation over there.
You point out in your representations about—poverty is probably
the wrong word—the deprivation that occurs in Northern Ireland.
Do you think that the impact of tax credits and all of these problems
that you have outlined has had a disproportionate effect in Northern
Ireland because of these social problems?
Mr Higgins: It is interesting—I
was looking at the statistics earlier in the week—if you
compare the take-up statistics to the likes of, say, the North
East of England, taking into account the differential in population
size, the figures are at a similar level. I suppose in general
terms take-up seems to be on average with the GB average, but
what I would say is that the overpayment issue has taken away
from the issue of take-up of tax credits. I do think that is an
area that needs to be explored that advice centres and others
have not been able to properly explore because we have been inundated
by the overpayments issue, as you say. We have a small project
[funded by HMRC] going at the moment to do with problems of take-up
amongst ethnic minority communities in Northern Ireland and on
the face of it—is it only early days—it is highlighting
that there are under-claiming issues to do with that particular
section of the community. I am sure there are issues from other
sections as well.
Q119 Lorely Burt: I know that Northern
Ireland does receive a different consideration in terms of a lot
of the subsidy that you get. It is an apples and pears situation,
I know, there are some advantages and some disadvantages. Just
taking up this non take-up issue, do you think it has had a disproportionate
effect? Do you think the inequality is being increased? What is
your feeling about it?
Ms Williamson: I do think that
a lot of people, because it is a small region, are aware of the
problems with tax credit. Certainly one of the things that was
highlighted very strongly in the consultation was that people
are backing away from applying because they have had anecdotal
evidence from family members of debt. Yes, the problem is that
so many people genuinely try to work with the system and the system—
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